If you own your own business, you probably know the ways in which a brand can be subject to corruption. However, with several people working under you, it may be hard to spot the root of the discrepancy and how deep it runs. Your most trusted bookkeeper could be cooking the books right under your nose, and you may never suspect it!
One of the most common sources of fraud is theft. This may come in the form of stealing cash, embezzlement, and misappropriation of cash, inventory, or other physical assets. All
these transgressions are severe and can threaten the life of your business, as well as have legal ramifications.
However, frauds are most witnessed in small to medium-sized businesses due to the lack of proper security checkups and fraud-proofed operation systems. Also supporting this claim is the fact that in a small business, usually, only one person is responsible for the bookkeeping and accounting functions. They are single-handedly entrusted with receiving cash, payments, payroll tracking expenses, paying bills, bank deposits, and more! Being able to work privately and on their own, a bookkeeper may be tempted to involve themselves in fraud or embezzlement.
If you are constantly on edge and confused as to why your business is not bringing in more profits, despite all your efforts, chances are your brand is being corrupted by your own employees. Read our signs to watch out for, as well as ways to protect your business from fraud.
Detect the Signs for Corruptions
With every business, there is always a chance of corruption. However, detecting corruption in a small business can be relatively simple. Possible signs that may indicate fraud, theft, or embezzlement in the business are most often apparent. It is important to pay close attention to signs of potential corruption and dig deeper to find the root. One such way you can achieve this is by keeping a closer eye on your trusted employees to avoid any fraud. Money makes people do some crazy things.
Study Your Accounting Statements
Studying your accounting statements is crucial to saving your company from corruption. However, to do an accurate assessment, you must have a basic understanding of what you are looking at. It may be a good idea to do some research about your financial statements. Understanding how the statements work and what they are saying is necessary for finding potential corruption.
Maintain a System of Checks and Balances Among Your Employees
Be sure to keep a system of checks and balances within your staff. Sure, you trust them. Still, it is of the utmost importance to audit their work regularly to ensure compliance. By doing this, you will stay current with your financial affairs, as well as reduce corruption.
Look for any Excessive transactions Taking Place
Excessive spending by employees is not conducive to financial stability. Scrutinizing the spending habits of your employees is an excellent way to avoid corruption.
Keep all the Cameras on
Today, most offices have cameras in almost every nook and cranny to protect the business from theft, inappropriate behavior, time-wasting, etc. Keep these cameras on during and after the shift to ensure safety and prevent fraud.
Avoid Late Working
In most companies, an employee who stays late to finish the job is appreciated and praised. However, having the office all to themselves may contribute to corruption. For this reason, it is recommended to advise against being alone in the office.
Advance into Technology – Use Accounting Software
Whether you use electronic systems for your accounting or do the bookkeeping manually on a register, take great care to ensure there are no discrepancies. Your financial statements should match every cash flow statement and balance sheet of the accounts.
However, due to human error, consider investing in software to manage your books. This may help in preventing fraud and increasing efficiency.
Make Auditing a Routine Practice
As stated above, delegating the accounting to only one person may open doors to corruption and fraud. However, if this is the way it must be for your business, make it a practice to audit your own accounts regularly. This will promote a culture of honesty and integrity.
Conclusion
There you have it! You have just read some of the most practical ways of detecting corruption in your business. Use them to your advantage and remember, there is nothing wrong with being vigilant. It is your business and, therefore, your neck on the line!
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